8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (Oct 30, 2020)

Filed October 30, 2020For Securities:XELXELLL

Summary

Xcel Energy Inc. (XEL) announced via an 8-K filing on October 30, 2020, that its subsidiary, Public Service Company of Colorado (PSCo), was denied its request for an Advanced Grid Rider by the Colorado Public Utilities Commission (CPUC). This rider was intended to recover incremental costs associated with the Advanced Grid Intelligence and Security (AGIS) initiative. The Administrative Law Judge (ALJ) granted a motion for summary judgment filed by the Office of Consumer Counsel (OCC), ruling that the rider was precluded by a prior settlement agreement that allowed for cost deferral and recovery in a base rate case. While the denial of the rider is a procedural setback, Xcel Energy stated that the AGIS initiative's merits are not negated. PSCo is currently evaluating its options, which include seeking reconsideration, filing an electric rate case, or adjusting spending on certain non-cost deferral items. Importantly, the company reaffirmed its 2021 earnings per share guidance of $2.90 to $3.00, indicating that this matter is not expected to have a material impact on 2021 results.

Key Highlights

  • 1Xcel Energy's subsidiary, PSCo, had its request for an 'Advanced Grid Rider' denied by the Colorado Public Utilities Commission (CPUC).
  • 2The rider was sought to recover costs for the Advanced Grid Intelligence and Security (AGIS) initiative.
  • 3The denial was based on a ruling that the rider was precluded by a previous settlement agreement allowing cost recovery through a base rate case.
  • 4PSCo is exploring options including reconsideration, a new rate case, or spending adjustments.
  • 5Xcel Energy expects no material impact on its 2021 financial results.
  • 6The company reaffirms its 2021 earnings per share guidance of $2.90 to $3.00.

Frequently Asked Questions

The Advanced Grid Rider was a request by Xcel Energy's subsidiary, PSCo, to recover incremental costs related to its Advanced Grid Intelligence and Security (AGIS) initiative. It was denied by the Administrative Law Judge (ALJ) on October 29, 2020, because a prior settlement agreement for the AGIS initiative already allowed for the deferral and recovery of these costs within a base rate case, making the rider redundant and impermissible.

Xcel Energy explicitly stated that this matter is not expected to have a material impact on its 2021 results. The company has reaffirmed its previously issued 2021 earnings per share guidance, which ranges from $2.90 to $3.00.

PSCo is currently evaluating its available options. These include potentially requesting a reconsideration of the ALJ's decision, initiating a new electric rate case, or adjusting planned spending on certain aspects of the AGIS initiative that were not covered by cost deferrals.

No, the filing specifies that the ALJ's ruling is procedural and does not negate the merits of the AGIS initiative itself. PSCo will continue to pursue cost recovery and implementation through other regulatory avenues, such as a base rate case, as allowed by the previous settlement agreement.